Most often, the agencies cite the Garden State's high debt and a rainy day fund too small to rescue the budget from shortfalls in tax collections.

Moody's said this downgrade of the state's general obligation debt from A2 to A3 "reflects the continued negative impact of significant pension underfunding, including growth in the state's large long-term liabilities, a persistent structural imbalance, and weak fund balances."

While the agency lowered the credit rating, it declared the state's outlook at that level stable for the next year to 18 months "due to solid economic performance and the expectation that any fiscal 2017 budget gaps will remain manageable."

Longer term, the credit analysts were less generous, saying the credit profile will only worsen as the pension system's unfunded liabilities pile on and demand an ever-larger share of the annual state budget.

Christie has put the state on a schedule to contribute the full pension contribution recommended by actuaries in 2023. His proposed budget for next year includes a $2.5 billion pension payment -- about half of the full contribution.

That plan isn't aggressive enough to warrant an upgrade, Moody's said. But anything less and the state could be looking at another downgrade.

These payments are "well below the level that would allow the state's reported net pension liability to tread water -- or remain stable from one year to the next," Moody's said.

Just keeping up with Christie's schedule will be increasingly difficult, though, because the Legislature and Christie agreed to give up more than $1 billion in tax revenue annually in exchange for a 23 cent increase in the gas tax.

While complimenting the governor for holding down discretionary spending -- most of the increases in spending are directed to employee pensions and health care -- Moody's said "the budget continues to rely on optimistic revenue assumptions and bolsters near-term financial stability at the expense of long-term pension health."

In addition, they said, the state's position is weakened because New Jersey does not forecast its revenues over multiple years, and that it allows the governor to certify how much money will come in, rather than through a consensus of budget experts.

Christie's forecasts have been a source of controversy. If revenues miss the mark, as they often do, the state doesn't have enough money to meet its obligations and so must make last-minute adjustments to keep the budget in balance.

"Given that the state had mid-year revenue shortfalls in four of the past six years, revenue forecasting will continue to challenge future budgets," the analysts said.

A state Treasury Department spokesman said Monday that the state's financial outlook would be "much worse" but for Christie's efforts, including pension reforms that required employees to kick in more and suspended cost-of-living adjustments, record-high pension contributions, and legislation he signed requiring the state to make its payments quarterly.

"This rating action confirms what the governor has been saying since 2009," spokesman Will Rijksen said. "The pension system must be reformed or it will fail and continue to damage the entire state budget."

In his February budget address, Christie called for the state to transfer its lottery assets to the pension fund, but his office has provided few details about the proposal.

Rijksen said the governor hopes the Legislature will approve that change before the end of the fiscal year in June.